Carbon Tax v. Cap And Trade

The carbon exchange itself, of course, does need to be set up and
kept in operation by a government agency. That's extra work compared
to a tax, and it has to be done right. Still, this is hardly untrod
territory. There are hundreds of electronic commodity exchanges around
the world and we know how to set one up. In fact, we've done it before
for other cap-and-trade programs, and the operation of the exchange
itself has never been that big a deal ...

O'Hare's right that cap-and-trade is no cheaper than a tax (and it would be
dishonest to imply otherwise), but I think he's wrong to believe that
setting the proper tax level is easier and more efficient than setting
the cap level directly. From the point of view of both politics and
public support, I think it's exactly the opposite.

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.